DOI: 10.36347/sjahss.2014.v02i01.001

Pages: 1-8

This paper investigates the relationship between foreign direct investment (FDI) and economic growth in Nigeria between 1970-2011. The ordinal least square method is used to show the relationship between foreign direct investment and gross domestic product in Nigeria. Gross domestic product is taken as dependent variable while foreign direct investment, Government Size, Exchange Rate, Interest Rate, Political stability, Index of electricity consumption and Capital expenditure as independent variables. All the variables used are integrated of order one. The results suggest that there is a positive relation between foreign direct investment, exchange rate, Index of electricity consumption and gross domestic product in the country. In the light of the above, the paper recommends, among other things, the creation of enabling business environment in Nigeria through the improvement in power supply and political stability which will help in no small measure in boosting investors’ confidence as instability scare way prospective investors.